Exhibit 10.16
SEPARATION AGREEMENT
This Separation Agreement is made and entered into December 23, 1997,
between Xxxxxxx X. Xxxxxx (Employee) and Deluxe Corporation, a Minnesota
corporation having its principal offices at 0000 Xxxxxxxx Xxxxxx Xxxxx,
Xxxxxxxxx, Xxxxxxxxx 00000 (Deluxe).
WHEREAS, Employee has been employed by Deluxe pursuant to an agreement
dated as of October 24, 1994; and
WHEREAS, the parties agree to set forth herein the terms and conditions
under which such employment is terminated.
NOW THEREFORE, in consideration of the mutual benefits and promises
contained herein the parties agree as follows:
1. Termination. Employee and Deluxe agree that Employee voluntarily
terminates his employment with Deluxe on January 1, 1998 (Termination Date).
2. Payments and Benefits. Deluxe and Employee agree that the following
payments and benefits, less applicable payroll and any supplemental deductions,
shall be provided by Deluxe to Employee:
A. Two Hundred Fifty Thousand and 00/100 Dollars
($250,000.00).
B. All accrued vacation pay as of Termination Date.
C. Accrued amount in Employee's Stock Purchase Plan
Account as of Termination Date.
D. Payment to Employee of his accrued balance in his
Deferred Compensation and Supplemental Retirement
Plan Account in accordance with the terms of the
Plans and the payout option selected by Employee.
Where the Plans allow, Employee may transfer his
balance to other plans of his choosing.
E. Any contribution for 1997 to the Deluxe retirement
plans in which Employee is a participant and the
Deferred Compensation Plan in accordance with the
plans. Where the Plans allow, Employee may transfer
his balance to other plans of his choosing.
F. Executive out-placement services through an agency
chosen by Employee, the fee for which shall be
negotiated by Deluxe. Such services shall be paid for
by Deluxe upon receipt of an invoice from the agency.
G. One Thousand One Hundred and 00/100 Dollars
($1,100.00) per month for the twelve (12) month
period following Termination Date in connection with
payment of Employee's automobile expenses.
H. Continuation of financial planning assistance through
AMG for the twelve (12) month period following
Termination Date.
I. Payment of premiums at employee rates for and
provision of medical, dental, vision and life
coverage for the twelve (12) month period following
Termination Date, and further continuation of medical
coverage as though Employee were a qualified retiree
at 58 years of age having thirty-six (36) years of
service, as each such plan shall change from
time-to-time until Employee is eligible for Medicare
coverage at which time Medicare coverage shall become
primary and coverage provided by Deluxe shall become
secondary.
J. Payment of up to Four Thousand and 00/100 Dollars
($4,000.00) in legal expenses for Employee's
attorney's review and negotiation of this transaction
on Employee's behalf upon receipt of an invoice from
such attorney.
K. Thirty-One Thousand Seven Hundred Fifty and 00/100
Dollars ($31,750.00) in lieu of receipt of One
Thousand Two Hundred Ninety (1,290) restricted stock
units granted on February 9, 1996 under the Deluxe
Corporation Annual Incentive Plan. Employee
acknowledges that Employee's rights to receive
incentive compensation under such plan will terminate
as of Termination Date.
L. In accordance with approval of the Compensation
Committee of the Board of Directors the (1) vesting
of the unvested nonqualified stock options granted to
Employee (a) on November 11, 1994 to purchase 8,000
shares thereunder; (b) on February 9, 1996 to
purchase 12,000 shares thereunder; and (c) on January
31, 1997 to purchase 15,000 shares thereunder of
Deluxe common stock (with respect to all shares then
remaining under such options) in accordance with the
provisions of the applicable option agreements, as
amended, including the five (5) year period of
exercise applicable to each such option, as if
Employee had satisfied the requirements for approved
retirement as therein specified and the Termination
Date were the date of Employee's retirement; (2)
continuation of Employee's rights, as if Employee had
retired in accordance with applicable policies, with
respect to the 5,000 (up to a maximum of 7,500) stock
units granted on February 9, 1996 under the Deluxe
Corporation Performance Share Plan plus any
additional stock units determined and resulting
thereunder in lieu of the payment of dividends.
M. Beginning on the first day of the second month
following Termination Date and continuing for up to a
eight (8) month period thereafter, payment to
Employee of any difference in Employee's basic
monthly compensation at Deluxe and any lesser amount
earned by Employee during the immediately prior
month. Employee shall use reasonable, diligent
efforts to obtain monthly compensation at the
earliest opportunity and within five (5) days
following the close of any month for which Employee
claims payment hereunder, Employee shall provide
Deluxe documentation satisfactory to Deluxe of all
compensation earned by Employee for his services in
the month for which he makes such claim.
N. Employee's target incentive bonus for 1997.
O. Assignment to Employee of the Manufacturer's Life
Insurance Company single premium deferred annuity No.
5009136-2.
The payments and benefits described in subsections B, C and D of this Section
shall be provided by Deluxe to Employee on Termination Date. Except as otherwise
provided, the payments and benefits described in this Section shall be provided
by Deluxe to Employee upon receipt of the signed Separation Agreement and a
Release in the form attached as Exhibit A, but no earlier than five (5) nor
later than seven (7) days after the expiration of the rescission period referred
to in Section 6. Such payments shall be reduced by any amount Employee owes
Deluxe for outstanding credit card or other charges. Any payment to Employee
described in this Agreement shall be made by automated transfer to Employee's
Deluxe payroll account using Deluxe's payroll department.
3. Full Compensation. The payments that will be made to Employee or for
his benefit pursuant to this Separation Agreement shall compensate him for and
extinguish any and all claims he may have arising out of his employment with
Deluxe or his employment termination as of the effective date of the Release,
including but not limited to claims for attorneys' fees and costs, and any and
all claims for any type of legal or equitable relief.
4. Benefits. Employee is a participant in various employee benefit
plans sponsored by Deluxe. Unless otherwise agreed hereunder, the payment or
cancellation of benefits, including the amounts and the timing thereof, will be
governed by the terms of the employee benefit plans. Deluxe will provide
Employee the same assistance given other participants in employee benefit plans
so long as he is entitled to benefits thereunder.
5. Records, Documents and Property. Employee will return to Deluxe all
of its property including, but not limited to its records, correspondence and
documents as well as all keys, corporate charge cards and computers.
6. Rescission. Employee acknowledges that he has had a period of
twenty-one (21) days in which to consider this Separation Agreement and the
Release referred to in Section 7 and deliver signed originals of them to the
officer and at the address set out below in this Section. Once this Separation
Agreement and the Release are executed, Employee may rescind this Separation
Agreement and the Release within seven (7) calendar days to reinstate federal
claims and fifteen (15) days to release Minnesota claims. To be effective, any
rescission within the relevant time periods must be in writing and delivered to
Deluxe Corporation, in care of Xxxxxxx X. Xxxxxx, Vice President, Deluxe
Corporation, 0000 Xxxxxxxx Xxxxxx Xxxxx, Xxxxxxxxx, Xxxxxxxxx 00000, either by
hand or by mail within the respective periods. If sent by mail, the rescission
must be (1) postmarked within the respective periods (2) properly addressed to
Deluxe Corporation; and (3) sent by certified mail, return receipt requested.
7. General Release. In consideration of the payments and other
undertakings stated herein, the parties shall sign a separate Release in the
form attached hereto as Exhibit A at the time each signs this Separation
Agreement.
8. Resignation. Employee agrees that as of Termination Date he will
resign as a Senior Vice President of Deluxe.
9. Confidential Deluxe Information. Employee agrees that for a period
of one (1) year after execution of this Agreement unless so ordered by a court
or governmental agency, Employee will not use or disclose Confidential
Information of Deluxe.
"Confidential Information" means all confidential or proprietary
information of Deluxe or any affiliate, including without limitation, financial
data, trade secrets, customer and mailing lists, business plans, sales and
marketing plans, business acquisition or divestiture plans, data processing
systems unique to Deluxe or any affiliate, information services systems unique
to Deluxe or any affiliate, pricing and credit policies and practices unique to
Deluxe, books and records, research and development activities relating to
existing commercial activities and new products, services and offerings under
active consideration, which Employee may have acquired or obtained during the
course of Employee's employment with Deluxe.
10. Nonrecruitment. For a period of one (1) year after Termination
Date, Employee shall not for himself or any other person or entity either,
directly or indirectly, recruit for employment any person who at any time during
the period one (1) year prior to Termination Date through Termination Date is or
was an employee of Deluxe or any of its affiliates or subsidiaries.
11. Noncompetition. Employee agrees that for a period of one (1) year
after Termination Date, Employee will not (a) serve as an officer, principal,
advisor, agent, partner, director, stockholder, employee or consultant of any
corporation or other business enterprise that engages in activities, directly or
through an affiliate, that are directly competitive with the commercial
activities of Deluxe from which it derives a
significant portion of its revenue and which were engaged in by Deluxe at the
time of the termination of Employee's employment without the prior written
consent of the President and Chief Executive Officer of Deluxe Corporation; or
(b) with respect to such activities that are directly competitive, cause
customers, distributors, suppliers or consultants under contract or doing
business with Deluxe at any time within one year prior to and including the
Termination Date to modify their business relationships with Deluxe in any
material respect.
Ownership by Employee of less than one percent (1%) of the outstanding
shares of capital stock of any corporation, for investment purposes, shall not
constitute a breach of this provision.
For commercial activities to be "directly competitive" with those of
Deluxe within the meaning of this Agreement, such activities must consist of
selling or attempting to sell the same types of products or services from which
Deluxe Corporation now derives at least one percent (1%) of its revenue or which
are the subject of material business development plans of which Employee is
aware.
12. Non-Disparagement. The parties mutually agree that they shall not
disparage or defame each other in any respect or make any such comments
concerning the employment relationship between them.
13. Confidentiality. The terms of this Separation Agreement and the
Release shall be treated as confidential by both Employee and Deluxe and neither
party shall disclose its terms to anyone, except Employee may disclose the terms
of this Separation Agreement and the Release or any portions thereof, as needed,
to his immediate family, legal counsel, accountant and prospective or subsequent
employers, or in response to requests from such prospective or subsequent
employers to facilitate compliance with its terms or as ordered by a court or
governmental agency. Deluxe may disclose the terms of this Separation Agreement
and the Release to its officers and directors, outside auditors, employees who
have a legitimate need to know the terms in the course of performing their
duties and as required by law. Each party recognizes and agrees that this
confidentiality provision was a significant inducement for the other to enter
into this Separation Agreement and Release. Either party may disclose this
Agreement or its terms to its legal advisors for purposes of enforcement or in
the course of judicial proceedings.
14. Nonassignment. The parties agree that this Separation Agreement and
the Release will not be assigned by either party unless the other party agrees
to such assignment in writing.
15. This Agreement shall bind and inure to the benefit of the parties,
and as applicable, their respective heirs, personal representatives, successors
and permitted assigns. Successors, in the case of Deluxe, shall mean both direct
or indirect successors,
whether by purchase, merger, consolidation or otherwise, to all or substantially
all of the businesses or assets of Deluxe.
16. Merger. This Separation Agreement and the Release, and the employee
benefit plans in which Employee is a participant supersede all prior oral and
written agreements and communications between the parties. Employee and Deluxe
agree that any and all claims which either might have had against the other to
the extent described in the Release are fully released and discharged by this
Separation Agreement and the Release, and that the only claims arising out of
Employee's employment with Deluxe and his employment termination which either
may hereafter assert against the other will be derived only from an alleged
breach of the terms of the Separation Agreement, the Release or, as against
Deluxe, or any employee benefit plan in which Employee is a participant.
17. Entire Agreement. This Separation Agreement and Attachments
constitute the entire agreement between the parties with respect to the
termination of Employee's employment relationship with Deluxe, and the parties
agree that there were no inducements or representations leading to the execution
of this Separation Agreement or any of the Attachments except as herein
contained.
18. Voluntary and Knowing Action. Employee acknowledges that he has
been advised of his right to be represented by his own attorney, that he has
read and understands the terms of this Separation Agreement and the Release, and
that he is voluntarily entering into the Separation Agreement and the Release.
19. Governing Law. This Separation Agreement and the Release will be
construed and interpreted in accordance with the laws of the State of Minnesota.
20. Counterparts. This Separation Agreement and the Release may be
executed simultaneously in two or more counterparts, each of which will be
deemed an original, but all of which together will constitute one of the same
instrument.
IN WITNESS WHEREOF, the parties hereto have executed this Separation
Agreement as of the day and year first above written.
DELUXE CORPORATION EMPLOYEE
By: /s/ Xxxxxxx X. Xxxxxx By: /s/ Xxxxxxx X. Xxxxxx
Xxxxxxx X. Xxxxxx Xxxxxxx X. Xxxxxx
Title: Vice President
STATE OF MINNESOTA
COUNTY OF XXXXXX
I, Xxxxxxxx X. Xxxxx , a Notary Public, do hereby certify that Xxxxxxx X. Xxxxxx
personally known to me to be the same person whose name is subscribed to the
foregoing instrument, appeared before me this day in person and acknowledged
that he signed and delivered the said instrument as his free and voluntary act,
for the uses and purposes therein set forth.
Given under my hand and official seal this 7th day of January, 1997.
/s/ Xxxxxxxx X. Xxxxx
Notary Public
STATE OF MINNESOTA
COUNTY OF XXXXXX
The foregoing instrument was acknowledged before me this 7th day of January,
1997 by Xxxxxxx X. Xxxxxx, a Vice President of Deluxe Corporation, a Minnesota
corporation, on behalf of the Corporation.
/s/ Xxxxxxxx X. Xxxxx
Notary Public
EXHIBIT A
RELEASE
Definitions. We intend all words used in this Release to have their plain
meaning in ordinary English. Technical legal words are not needed to describe
what we mean. Specific terms we use in this Release have the following meanings:
A. We, as used herein, includes Deluxe Corporation defined at B and
Employee, as defined at C.
B. Deluxe Corporation or Deluxe, as used herein, shall at all times
mean Deluxe Corporation, its subsidiaries, successors and assigns, their
affiliated companies, their successors and assigns, their affiliated and
predecessor companies and the present or former officers, employees and agents
of any of them, whether in their individual or official capacities, and the
current and former trustees or administrators of any profit sharing, pension or
other benefit plan applicable to the employees or former employees of Deluxe, in
their official and individual capacities.
C. Employee, as used herein, means Xxxxxxx X. Xxxxxx or anyone who has
or obtains any legal rights or claims through him.
D. Employee's Claims means any rights Employee has now or hereafter to
any relief of any kind from Deluxe whether or not Employee knows now about those
rights, arising out of his employment with Deluxe, and his employment
termination, including, but not limited to, claims for breach of contracts;
fraud or misrepresentation; violation of the Minnesota anti-discrimination laws,
the Americans with Disabilities Act, or other federal, state, or local civil
rights laws based on disability or other protected class status; defamation;
intentional or negligent infliction of emotional distress; breach of the
covenant of good faith and fair dealing; promissory estoppel; negligence;
wrongful termination of employment; and any other claims for unlawful employment
practices. However, this Release shall not affect any claims which Employee
could have made under any welfare benefit plan or any profit sharing, pension or
retirement plan through Deluxe or which may arise under the Agreement to which
this Release is attached.
Agreement to Release Claims. Employee agrees that he is receiving a substantial
amount of money and benefits from Deluxe. Employee agrees to give up all
Employee's Claims against Deluxe in exchange for those payments and benefits.
Employee will not bring any lawsuits, file any charges, complaints, or notices,
or make any other demands against Deluxe based on Employee's Claims. Employee
agrees that the money and benefits Employee is receiving are full and fair
compensation for the release of all Employee's Claims. Employee agrees that
Deluxe does not owe Employee anything in addition to what Employee will be
receiving.
Employee understands that he may rescind (that is, cancel) this Release within
seven (7) calendar days of signing it to reinstate federal claims and within
fifteen (15) days to
reinstate state claims. To be effective, Employee's rescission must be in
writing and delivered to Deluxe Corporation in care of Xxxxxxx X. Xxxxxx, Vice
President, Deluxe Corporation, 0000 Xxxxxxxx Xxxxxx Xxxxx, Xxxxxxxxx, Xxxxxxxxx
00000, either by hand or by mail within the relevant period. If sent by mail,
the rescission must be postmarked within the relevant period, properly addressed
to Deluxe Corporation, and sent by certified mail, return receipt requested.
Deluxe agrees to give up any claim against Employee that Deluxe may have now or
hereafter arising from Employee's employment with Deluxe, except as may arise
under the Agreement to which this Release is attached.
We acknowledge that we have read this Release carefully and understand all its
terms. In agreeing to sign this Release, we have not relied on any statements or
explanations made by either of us.
We agree that this Release shall be effective as of the last date set out below.
Deluxe and Employee understand and agree that this Release, the Agreement and
the Deluxe employee benefit plans in which Employee is a participant, contain
all of the agreements between Deluxe and Employee. We have no other written or
oral agreements.
Dated: December 23 , 1997 /s/ Xxxxxxx X. Xxxxxx
Xxxxxxx X. Xxxxxx
Witnesses:
/s/ Xxxxxx X. Xxxxxxx
/s/ Xxxxxxxx X. Xxxxx
DELUXE CORPORATION
Dated: December 23 , 1997 By: /s/ Xxxxxxx X. Xxxxxx
Xxxxxxx X. Xxxxxx
Vice President
Witnesses:
/s/ Xxxxxx X. Xxxxxxx
/s/ Xxxxxxxx X. Xxxxx
